Friday, Aug. 29, 2008 | Like a debutante slimming down before meeting with suitors, The San Diego Union-Tribune is shedding more employees as it seeks a buyer during the newspaper industry’s historic slump.
The paper told workers Thursday that it hopes to eliminate about 78 positions through buyouts. Eligible employees can apply to leave the paper in return for severance pay based on how long they’ve worked there.
The U-T already made deep cuts over the past two years through buyouts and layoffs and now has 1,000 full-time employees. However, the newspaper industry has faced unprecedented financial challenges this year amid shrinking circulation, rising costs and slumping advertising.
By one estimate, American newspapers have cut more than 8,300 jobs this year. “This has been almost a daily litany,” said Mark Potts, a media consultant and former Washington Post journalist. As the Union-Tribune tries to find a buyer, he said, “I’m sure they’re trying to tidy up the books and get the budget down a little bit.”
Buyouts are typically designed to help employers reduce costs by getting rid of older workers who cost more. “A reduction in force suggests they have a certain profit target in mind that they’ve tried to achieve, and they’re coming up short,” said Alan Mutter, a media analyst and former newspaper executive.
After the buyouts, the newspaper can then tell any potential suitor that “we didn’t need these people anyway,” he said.
The Copley Press, the Union-Tribune‘s parent company, announced late last month that it has hired an investment banker to pursue a possible sale. The asking price is unknown.
The timing of that announcement mystified media analysts because 2008 has been the worst year in memory for the newspaper industry.
Like other newspapers, the U-T has suffered from declining circulation and advertising. The Audit Bureau of Circulation reported that the paper’s paid weekday circulation averaged 288,669 in the six months prior to April 1. That’s up slightly from the number for all of 2007 — 285,294 — but down from 311,324 at the end of 2004.
Thursday morning, the newspaper sent staffers a list of positions (which it called “focus areas”) that it is seeking to eliminate through buyouts. The paper called it a “voluntary separation program.”
The newsroom will take the biggest hit — the paper wants to buy out 31 employees there. The paper is also trying to eliminate jobs in the advertising, marketing and packaging department, among others.
It appears that the paper is trying to preserve its focus on local government and watchdog journalism but cut back on staff-written coverage of state and national politics, among other topics.
In the newsroom, the list includes two critics, four members of the photo staff, two members of the Washington D.C. bureau, one member of the Sacramento bureau, and three middle managers, among others.
The newspaper excluded a number of newsroom positions from buyouts, including editorial columnists and the editorial cartoonist, the border reporter and the politics reporter. Also excluded are the “San Diego government team” and “watchdog team.” In addition, the sports department is largely ineligible for buyouts.
The paper told employees that “it makes no sense … to offer the (buyout) program to an employee whose essential expertise could only be replaced by hiring from outside the company.”
The buyouts could leave the newsroom with about 250 employees instead of the current number, estimated at about 280. If the paper’s circulation is 288,000, that would leave it with .86 newsroom employees per 1,000 subscribers, lower than the unwritten industry standard of one per 1,000.
Mutter, the media analyst, reports that a number of newspapers have dipped below the ratio of 1-per-1,000 in recent months, including the Los Angeles Times which fell to the level of .92-per-1,000.
Those who take the buyout would leave the paper by Sept. 30, according to an internal memo.
The Union-Tribune‘s finances are private, making it difficult to interpret the meaning of the buyout. The fact that buyouts are being offered — instead of immediate layoffs — might suggest that the paper has cash on hand and is not facing imminent financial disaster. While the buyout offer is less generous than previous deals, the newspaper is offering two weeks of pay per year of service, up to 52 weeks.
However, media consultant Potts said it’s also possible that the newspaper raided its pension fund to pay for the buyouts and is not dipping into cash reserves.
The newspaper could pay a hidden cost for the buyouts by losing institutional memory that allows journalists to connect the past to today, Potts said. On the other hand, he said, newsrooms often have plenty of “dead wood,” although “sometimes the dead wood doesn’t take the buyouts and good people do.”
Those who do take buyouts can actually end up being happier in the long run, Potts said.
“You very rarely find someone who took a buyout who’s unhappy a year later,” he said. “They get their lives back together, they’ve got some cash in the bank and can find another job. People in mid-career (can) need a kick in the butt like that to go off and try something else.”
Layoffs, of course, are another story. The newspaper didn’t rule out future layoffs and told employees that there would be no more voluntary buyouts prior to a sale.
Randy Dotinga is a San Diego-based freelance writer. Please contact him directly at firstname.lastname@example.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.